Oil Firm Seeks Md. Loophole

By R.H. MeltonFebruary 20, 1985

In 1974, swept by a wave of resentment against gasoline retailers after a nationwide fuel shortage, Del. Devin J. Doolan (D-Montgomery) joined 89 colleagues in the Maryland House to approve a law stripping oil companies of the right to operate service stations in the state.

But politics has a way of shifting alliances over time, which is why citizen Doolan, now a highly paid lobbyist for Crown Central Petroleum Corp., appealed today to members of a key House committee to add a loophole to the 1974 law that would enable his client to operate some of its 46 Maryland stations.

Crown Petroleum is headed by Henry Rosenberg, who was cochairman of Gov. Harry Hughes' reelection effort in 1982. An aide to Hughes said today the governor supports the exemption bill but has not discussed it with Rosenberg.

The proposal drew criticism from some legislators who characterized it as a blatant special-interest bill. However, Doolan argued that the legislation is essential to Crown's survival. "Without this relief, we are not going to be able to salvage our operation in this state," Doolan told members of the Economic Matters Committee.

The legislation, sponsored by Del. Paul E. Weisengoff, a Democrat from Baltimore where Crown established its headquarters nearly 50 years ago, would exempt those firms producing less than 175,000 gallons of petroleum products a day from the 1974 ban on station ownership. Crown, which employs about 350 people in Maryland, has the capacity to produce only 100,000 gallons at its well in Texas, company officials said.

Doolan, one of the most successful lobbyists in Annapolis who earned more than $112,000 last year representing banking, hospital and soap interests, told committee members that the existing state law drove several small refiners out of business in the late 1970s and now threatens to do the same to Crown.

The company, valued at $220 million, has reported successive losses for the last nine months, largely because of the worldwide oil glut and because of the Maryland law, Doolan said. He added that the exemption would improve Crown's footing in competition with giant oil companies and would save consumers money over time.

However, Crown's coveted relief was challenged today by several skeptics on the committee and outright opponents, including the Greater Washington-Maryland Service Station Association, a group of 1,100 operators who typically lease their stations from oil companies.

A spokesman for the group said he feared that Crown would simply break leasing agreements with some dealers if it wins an exemption.

"Is this a Crown bill or a small refiner bill?" asked Del. Gene W. Counihan (D-Montgomery). "If this passes and I were a Crown dealer, I might reasonably be suspicious about how long I could survive in Maryland."

Other supporters of the ban said it has kept gasoline prices lower than those in neighboring states.

Del. Patricia R. Sher, a Montgomery Democrat, also indicated she had reservations about the Crown bill. "There's a certain amount of patriotism in wanting to help out a Maryland company," Sher said in an interview. "On the other side of the coin, it is a special-interest bill and I have bad feelings about that."